Profitability, financial position and cash flow
The return on equity at the end of the financial year was 30 percent (31), and return on capital employed was 24 percent (25). Return on working capital P/WC (operating profit in relation to working capital) amounted to 47 percent (45).
The equity ratio at the end of the financial year stood at 39 percent (36). Equity per share, excluding non-controlling interest, totalled SEK 20.10 (16.70). The Group's net debt at the end of the year stood at SEK 524 million (523), excluding pension liabilities of SEK 252 million (239). The net debt/equity ratio, calculated on the basis of net debt excluding provisions for pensions, totalled 0.4 (0.5).
Cash and cash equivalents, consisting of cash and bank balances together with approved but non-utilised credit facilities, totalled SEK 559 million (668) at 31 Mars 2014.
Cash flow from operating activities reached SEK 479 million (339) in the financial year. Company acquisitions including settlement of additional purchase consideration regarding acquisitions implemented in previous years amounted to SEK 205 million (311). Investments in non-current assets totalled SEK 58 million (42) and disposal of non-current assets was SEK 4 million (2). Dividend for the year totalled SEK 176 million (174), the repurchase of own shares amounted to SEK 15 million (-) and exercised and issued call options were SEK 30 million (24).
At the end of the year, the number of employees was 2,150, compared to 2,011 at the beginning of the financial year. During the year implemented acquisitions led to an increase of 87 in the number of employees. Temporary positions of employment in the production also increased the number of employees by 53. The average number of employees during the financial year was 2,100 (1,815).
At the end of the finanical year the share capital stood at SEK 51.1 million.
|Class of shares||Number of shares|
|Class A shares||3,253,800|
|Class B shares||64,944,696|
|Total number of shares before repurchases||68,198,496|
|Total number of repurchased class B shares||-2,063,400|
|Total number of shares after repurchases||66,135,096|
The extraordinary general meeting of Addtech AB on 19 November 2013 decided to implement a share split by dividing each share into three (3) shares. The number of shares in the company increased to 68,198,496, of which 3,253,800 are Class A shares and 64,944,696 are Class B shares; each share having a quotient value of SEK 0.75. The share spilt took place on 13 December. The split also meant that each call option outstanding entitles the holder to three Class B shares.
During the year, 50,900 treasury shares were repurchased, which, after the split, corresponds to 152,700 shares. The own holding of 2,063,400 Class B shares corresponds to 3.0 percent of the total number of shares and 2.1 percent of the votes. The average purchase price for repurchased shares amounts to SEK 45.60 per share. The most recent price paid for the Addtech share on 13 May 2014 was SEK 100.25. The average number of treasury shares held during the year was 2,195,148 (2,804,404).
In accordance with a resolution of the August 2013 AGM, 25 members of management were offered the opportunity to acquire 180,000 call options on repurchased Class B shares. The programme was fully subscribed for. If the options are fully exercised, the number of Class B shares outstanding will increase by 540,000, equivalent to 0.8 percent of the total number of shares and 0.6 percent of the votes. The call options were transferred at a price of SEK 21.20 per option, equivalent to the fair (market) value of the options based on an external valuation.
The exercise price for shares attributable to issued call options regarding the share-based incentive programme for 2010 is SEK 54.90; the exercise period is 16 September 2013 until 30 May 2014 inclusive. During the period 16 September 2013 until 31 Mars 2014 inclusive, 113,900 options, of a total of 221,700, were exercised for shares.
The exercise price per share attributable to issued call options regarding the share-based incentive scheme for 2011 is SEK 59.80; the exercise period is 15 September 2014 until 29 May 2015, inclusive.
The exercise price per share attributable to issued call options regarding the share-based incentive scheme for 2012 is SEK 71.50; the exercise period is 14 September 2015 until 3 June 2016, inclusive.
The exercise price per share attributable to issued call options regarding the share-based incentive scheme for 2013 is SEK 106.13; the exercise period is 19 September 2016 until 2 June 2017, inclusive.
Issued call options for repurchased shares represent a potential dilution effect of approximately 0.7 percent during the financial year (0.2). The corresponding dilution effect is 0.8 percent for the latest quarter (0.4). The share price at 31 Mars 2014 was SEK 101.75.
During the period 1 April to 31 December 2013 Addtech acquired Valnor AS to become part of the Components business area, the Rutab Group to become part of the Energy business area, Holger Eldfast AB and Sittab AB to join the Industrial Solutions business area and Vimex AS to the Life Science business area. For more information on these acquisitions see previous interim reports and Addtech's website.
During Q4 the operations in the company Hantor-Mittaus OY were acquired to join the Components business area. Hantor-Mittaus has five employees and sales of about SEK 10 million.
The total consideration for the year's five acquisitions was SEK 234 million. The combined effect of the acquisitions on the Addtech Group's net sales was SEK 225 million, on operating profit it was SEK 15 million and on profit after tax for the year it was SEK 9 million. Had the acquisitions been completed on 1 April 2013, their impact would have been an estimated SEK 300 million on Group net sales, about SEK 22 million on operating profit and some SEK 15 million on profit after tax for the year.
According to the preliminary acquisition analyses, the assets and liabilities included in the acquisitions were as follows:
|Carrying amount at acquisition date||Adjustment to fair value||Fair value|
|Intangible non-current assets||1||135||136|
|Other non-current assets||18||-||18|
|Other current assets||94||-||94|
|Deferred tax liability/tax asset||-8||-31||-39|
|Acquired net assets||50||101||151|
|Less: cash and cash equivalents in acquired businesses||-15|
|Less: consideration not yet paid||-53|
|Effect on the Group’s cash and cash equivalents||166|
|1) The consideration is stated excluding acquisition expenses.|
For acquisitions that resulted in ownership transfer during the financial year, transaction costs totalled SEK 1 million and are recognised in selling expenses.
Of the consideration not yet paid for acquisitions during the year, estimated fair value of contingent consideration amounts to SEK 21 million, which constitutes about 61 percent of the maximum outcome. The outcome depends on the results achieved in the companies and has a set maximum level.
Revaluation of liabilities for contingent consideration added income of SEK 16 million (6) during the year, which is recognised under other operating income.
This year-end report was prepared as per IFRSs and IAS 34 Interim Financial Reporting.
The accounting policies and basis for calculations applied in the latest annual report were also used here with the exception of the amended IAS 19, Employee Benefits, which has been applied since 1 April 2013. The change eliminates the option of deferring actuarial gains and losses according to the corridor method. The standard also contains new rules for the reporting of special employer's contribution. The standard applies with retroactive effect, which means that the comparative figures in the balance sheet have been recalculated. As at 31 March 2013 pension liabilities rose by SEK 38 million, including special employer's contribution of SEK 13 million, and equity fell by SEK 25 million net, of which SEK 9 million via comprehensive income. As at 31 March 2012 pension liabilities rose by SEK 49 million, including special employer's contribution of SEK 11 million, and equity fell by SEK 33 million, net. The effect on the income statements is deemed negligible, so recalculation has not been performed. On the basis of the changes in IAS 19 the company has decided to change the definition for the calculation of the net debt/equity ratio, where the net is calculated excluding provisions for pensions.
Extended disclosure for fair value according to IFRS 7 and for financial instruments according to IFRS 13 have been included in this report.
Recalculation of historical key figures per share took place following the split into three shares in the third quarter.
The year-end report for the parent company was prepared in accordance with the Swedish Annual Accounts Act (1995:1554) and the Securities Market Act (2007:528), in compliance with recommendation RFR 2 Accounting for Legal Entities, of the Swedish Financial Reporting Board.
Parent Company net sales totalled SEK 48 million (45) and profit after financial items was SEK 211 million (243). This amount includes revenues of SEK 203 million (234) from shares in Group companies. Net investments in non-current assets were SEK 5 million (0). The Parent Company's net financial debt was SEK 40 million (44) at the end of the year.
Proposals to the Annual General Meeting to be held 27 August 2014
The Annual General Meeting will be held in Stockholm at 4:00 p.m., Wednesday, 27 August 2014.
The Board of Directors proposes a dividend of SEK 3,00 per share (2.67), representing a dividend payout ratio of 55 percent (55). The total dividend payment amounts to SEK 199 (176).
Addtech's dividend policy implies a goal of paying a dividend in excess of 50 percent of consolidated average profit after taxes over a business a cycle.
The Board of Directors has also decided to propose to the Annual General Meeting that the mandate to repurchase up to 10 percent of the shares outstanding in the Company should be renewed.
Transactions with related parties
No transactions between Addtech and related parties that materially affected the Group's position and profit took place during the period.
Events after the end of the interim period
Two company acquisitions took place after the end of the reporting period:
On 1 April GigaCom AB and GigaCom AS were acquired to become part of the Addtech Components business area. The GigaCom companies are technology trading companies that provide fiber optic components and systems in the Swedish and Norwegian markets. The companies have 6 employees and sales of about SEK 30 million.
Solar Supply Sweden AB was acquired on 5 May to join the Addtech Energy business area. Solar Supply is a technology trading company that markets and installs solar cell systems with related components in the Swedish market. Solar Supply has 3 employees and sales of about SEK 15 million.
The acquisition analyses are not yet complete and will be presented in the next interim report.
No other events of significance to the Group occurred after the end of the reporting period.
Risks and factors of uncertainty
Addtech's profit and financial position, as well as its strategic position, are affected by a number of internal factors under Addtech's control and by a number of external factors over which Addtech has limited influence. The most important risk factors for Addtech are the state of the economy, combined with structural change and the competitive situation. Risk and uncertainty factors are the same as in previous periods, please see section Risks and uncertainties (page 24-25) in Addtech's 2012/2013 annual report for further details.
The Parent Company is indirectly affected by the above risks and uncertainty factors due to its role in the organisation.
Stockholm, 14 May 2014
|President and Director|
The interim report for the period 1 April-30 June 2014 will be published on 16 July 2014.
The Group's 2013/2014 annual report will be published as a web version on Addtech's website, www.addtech.com, in July 2014. It will be possible to download and print out a PDF version of the annual report. A printed PDF version will be sent to shareholders who have ordered one separately.
For further information, please contact:
Johan Sjö President and CEO, +46 8 470 49 00
Kristina Willgård, CFO, +46 8 470 49 10